Can employers be vicariously liable for actions of intoxicated workers?

Content updated with High Court of Australia decision: August 2023

In Queensland (and other states and territories of Australia), employers owe a duty of care towards their employees to protect them from the actions of other workers that cause injury or harm in the course of employment. This does not mean the person who caused the injury is not also liable. Both the employer and the worker who caused injury can be found liable.

In this article, we explore the case of Schokman v CCIG Investments Pty Ltd [2021] QSC 120 and Schokman v CCIG Investments Pty Ltd [2022] QCA 38 where the Court considered in detail the concept of vicarious liability. 

What is vicarious liability in personal injury law?

Vicarious liability is where an employer may be held legally responsible for the actions of employees (and others) for harm caused in the workplace. The employer need not have specifically or directly caused the harm themselves.

Background

In April 2021, the Supreme Court in Rockhampton considered a highly unusual workers’ compensation claim. Mr Schokman, the plaintiff, was a 25 year old restaurant supervisor at Daydream Island Resort. A condition of his employment was to share accommodation at the resort with his co-worker and subordinate, Mr Hewett.

Mr Schokman had underlying conditions of narcolepsy (a sleep disorder) and cataplexy (a sudden and brief loss of voluntary muscle tone triggered by emotional stress) which was well controlled by medication prior to the incident.

In the early hours of 7 November 2016, Mr Schokman awoke choking due to Mr Hewett urinating on his face, and in his mouth. He immediately suffered an attack of cataplexy; as well as insomnia, post-traumatic stress disorder, anxiety and depression later arising from the incident.

In defending the claim, the employer submitted Mr Hewett was so intoxicated he did not know where he was when the urination event occurred Indeed, the Court determined the incident occurred because Mr Hewett was ‘in a state of semi consciousness precipitated by his level of intoxication’.

Mr Schokman claimed his employer was negligent, breached the duty of care owed to him, and was vicariously liable for the conduct of its employee, Mr Hewett.

Supreme Court determines employer did not breach its duty of care

The Supreme Court accepted Mr Schokman sustained injury and that Mr Hewett committed a serious assault on Mr Schokman.

However, the Court rejected that the employer was vicariously liable for the conduct of a drunk employee because the incident did not occur in the course of employment. The Court held the risk that Mr Schokman would have a confrontation with a co-worker or roommate was foreseeable however, the urination event was not foreseeable for the employer to prevent or respond to the risk.

The Court determined there was no history of Mr Hewett becoming intoxicated or having an intoxication-related incident that would put the employer on notice that Mr Hewett may have engaged in bizarre conduct like the urination event.

Mr Schokman appealed the decision of the Supreme Court, to the Queensland Court of Appeal.

Court of Appeal found employer was vicariously liable

In March 2022, the Queensland Court of Appeal overturned the decision at first instance, finding in favour of Mr Schokman. The Court of Appeal determined that:

1. It was a term of Mr Schokman’s and Mr Hewett’s employment that they reside in the staff accommodation on the island and a room be assigned to them to share;
2. Whilst Mr Schokman and Mr Hewett remained employed at the resort, they were required to live there and once they ceased employment, they were required to leave;
3. Mr Hewett was not occupying the room as a stranger to Mr Schokman, but instead as a co-worker and an employee pursuant to his employment contract;
4. The terms of Mr Hewett’s employment required him to take reasonable care so that his acts did not adversely affect the health and safety of other persons.

The Court of Appeal found Mr Hewett’s conduct was not an act ‘entirely outside the relation of master and servant and therefore regarded as the act of a stranger’, and that there was sufficient connection between Mr Hewett’s employment and the event due to the provision of shared accommodation by the employer.

The Court of Appeal accepted Mr Schokman’s argument that the employer was vicariously liable for the wrongful conduct of its intoxicated employee.

Appeal to the High Court

On 16 September 2022, the High Court of Australia heard the employer’s application for special leave to appeal the Queensland Court of Appeal’s decision.

The employer submitted that - acts in which an employer can be held vicariously liable must bear a sensible relation to the activities for which the employee is employed to do within the scope of employment.

Mr Schokman’s representatives submitted that as a requirement of practicality of employment, the provision of shared accommodation was a contractual requisite provided by the employer. Therefore, matters incidental to employment, such as cooking a meal, or maintaining personal hygiene, are connected to employment.

The general obligation to take reasonable care that the employees’ acts did not adversely affect the health and safety of other persons whilst on the island was an obligation which governed the occupation of the shared accommodation.

The High Court granted the application for special leave.

High Court overturns decision of the Court of Appeal

The High Court unanimously overturned the decision of the Court of Appeal Queensland, finding the employer was not vicariously liable for the actions of Mr Hewett.

In their judgment, the court outlined the principles and intricacies surrounding employers’ vicarious liability, with particular emphasis on the concept of an act being within the 'course or scope of employment'.

Core principles for vicarious liability of employers

The court reiterated that for an employer to be held liable for the tort of an employee, the tortious act of the employee must have been committed in the course or scope of the employment. The principle behind this rule is that it is just to make the employer, who benefits from the actions of the employee, responsible for any injuries caused to another party due to the actions of the employee.

The court also highlighted that the employee's wrongful act must be closely connected with the duties they are employed to perform. However, determining this connection can be difficult, especially in novel cases. The essence lies in identifying what the employee was employed to do and whether the wrongful act can be seen as stemming from or connected to those duties. Mr Schokman’s argument relied on analogies to two cases, Prince Alfred College and Bugge v Brown.

An analogy with Prince Alfred College?

Mr Schokman attempted to draw parallels between his situation and the case of Prince Alfred College.

He argued that the compulsory shared accommodation made him vulnerable due to the intimate setting it created. However, the court distinguished this and clarified that the situation in Prince Alfred College was not sufficiently analogous to serve as precedent.

Prince Alfred College involved sexual abuse and turned on the fact that the abuser’s role as a housemaster afforded him a position of power and intimacy (being that the housemaster’s employment duties related to the shared accommodation) such that the abuse occurred in the course or scope of employment.

In Mr Schokman’s case, however, Mr Hewett did not hold any special role over Mr Schokman, and Mr Hewett’s employment duties had nothing to do with the accommodation.

An analogy with Bugge v Brown?

Mr Schokman pointed to similarities between his case and Bugge v Brown, which involved damage to property following the escape of a fire due to the employee following the employer’s instructions to cook their own meal.

In Bugge v Brown, the employment connection was established as the act of cooking was authorised by the employer.

In both Bugge v Brown and the Schokman case, the tortious act took place during a break from employment. However, the High Court distinguished the two cases.

In Bugge v Brown, the act of lighting a fire to cook a meal was directly connected to the employee's employment duties (and authorised actions) within working hours, whereas Mr Hewett's act was well outside of working hours and his actions were entirely unrelated to his employment duties, instead arising from intoxication during his leisure time.

The court emphasised that in Bugge v Brown, the act of cooking was an intrinsic part of the employee's tasks for the day, whereas Mr Hewett’s act of drinking after work hours was not sufficiently linked to his work duties. The court found that Mr Hewett’s mere shared proximity to Mr Schokman was insufficient to provide the requisite connection to render the employer liable.

High Court decision underscores the need for a direct connection to employment

The High Court's judgment underscores the importance of a direct connection between the wrongful act and the employment for vicarious liability to be imposed on the employer. Merely providing an opportunity for the wrongful act, such as shared accommodation in this case, does not suffice to establish this connection.

In essence, the act needs to be so closely tied to the duties or tasks the employee is employed to perform that it can reasonably be said to have been committed within the scope of their employment. The High Court's judgment reaffirms this principle and provides further clarity on its application in unique scenarios.

It is crucial for employees to understand their employer’s potential liabilities and to take appropriate steps to manage risks and ensure clarity of job roles and responsibilities. If you have any questions about vicarious liability, personal injury, or any other issues, don't hesitate to reach out to our experienced team at Hall Payne Lawyers.

Get help from a lawyer experienced in worker’s compensation and employment law

It is crucial for employees to understand their employer’s potential liabilities and to take appropriate steps to manage risks and ensure clarity of job roles and responsibilities. If you have any questions about vicarious liability, personal injury, worker’s compensation or any other issues, don't hesitate to reach out to our experienced team at Hall Payne Lawyers.

Contacting Hall Payne Lawyers

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